Menegazzo v PricewaterhouseCoopers (a firm)
[2017] QSC 172
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- Menegazzo v PricewaterhouseCoopers (a firm)[2017] QSC 172
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Menegazzo v PricewaterhouseCoopers (a firm)[2017] QSC 172
Menegazzo v PricewaterhouseCoopers (a firm)[2017] QSC 172
SUPREME COURT OF QUEENSLAND
CITATION: | Menegazzo v PricewaterhouseCoopers (a firm) [2017] QSC 172 |
PARTIES: | MARK JOHN MENEGAZZO (plaintiff) v PRICEWATERHOUSECOOPERS (A FIRM) (defendant) |
FILE NO: | BS 10502 of 2013 |
DIVISION: | Trial |
PROCEEDING: | Application |
DELIVERED ON: | 9 August 2017 (ex tempore) |
DELIVERED AT: | Brisbane |
HEARING DATE: JUDGE: | 9 August 2017 Atkinson J |
ORDER: |
“I have assessed the costs of the Second Defendant, Brendan Peter Menegazzo, and the Third Defendant, Debra Louise Menegazzo, as against the Plaintiff, Mark John Menegazzo, with respect to paragraph 2 of the Order of Justice Flanagan dated 4 December 2015, in the amount of ONE HUNDRED AND THIRTY-SEVEN THOUSAND AND SEVEN HUNDRED AND EIGHTY-SEVEN DOLLARS AND SEVENTEEN CENTS ($137,787.17) made up as follows:
TOTAL $137,787.17”
|
CATCHWORDS: | PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – COSTS – GENERAL MATTERS – GENERALLY – where the plaintiff was ordered to pay the costs of the second and third defendants of two interlocutory applications – where costs were to be assessed by a costs assessor on the standard basis – where the plaintiffs and the second and third defendants were represented by Queen’s Counsel at the interlocutory applications – where the costs assessor allowed the rate and number of hours of the Queen’s Counsel appointed by the second and third defendants – whether there was an error of principle in the costs assessor’s decision and reasons for allowing the fees of Queen’s Counsel in the costs assessment on the standard basis Uniform Civil Procedure Rules 1999 (Qld), r 702, r 703, r 720, r 722, r 742 Hennessey Glass & Aluminium Proprietary Limited v Watpac Australia Proprietary Limited [2007] QDC 57, cited Pinehurst Nominees Proprietary Limited v Coeur De Lion Investments Proprietary Limited [2015] QSC 122, cited WA Gilbey Limited v Continental Liqueurs Proprietary Limited [1964] NSWR 527, applied |
COUNSEL: | F Y Lubett for the plaintiff S K Hartwell for the defendant |
SOLICITORS: | Clayton Utz for the plaintiff Allens for the defendant |
- [1]This is an application for a review of two costs assessor’s certificates. The application is made pursuant to rule 742 of the Uniform Civil Procedure Rules 1999 (UCPR). I have been greatly assisted by extensive written and oral submissions, particularly on behalf of the plaintiff, who seeks a review of the decision. The reasons of the costs assessor are before me and arise from the fact that on 4 December 2015, Flanagan J ordered the plaintiff to pay the costs of the second and third defendants of two interlocutory applications which were heard together to be assessed. Those costs are by necessity on the standard basis.
- [2]To say that this was the hearing of two interlocutory applications might be to underestimate the complexity and the time taken for these matters. It is common ground that it was complex litigation concerning some $38 million, and both parties were represented by senior Queen’s Counsel. The only matter essentially in dispute before me is whether or not there was an error of principle in the costs assessor’s decisions and reasons for allowing the fees of a Queen’s Counsel briefed by the second and third defendants, both the rate per hour allowed and the number of hours allowed.
- [3]In order to determine whether or not there has been an error of principle, I have had regard to the content of the rules, in particular rule 702, the exegesis of the rule provided in authorities of this and other Courts and the reasons given by the assessor.
- [4]The assessment was conducted pursuant to rule 702, which provides as follows:
- (1)Unless these rules or an order of the Court provides otherwise, a costs assessor must assess costs on the standard basis.
- (2)When assessing costs on the standard basis, a costs assessor must allow all costs necessary or proper for the attainment of justice or for enforcing or defending the rights of the party whose costs are being assessed.
- (1)
- [5]This may be contrasted with the indemnity basis of assessment set out in rule 703, where a costs assessor must allow all costs “reasonably incurred and of a reasonable amount”, having regard to certain matters. So the test that the costs assessor is required to consider is whether or not the costs are necessary or proper. All such costs must be allowed by the assessor.
- [6]In her reasons for decision, the costs assessor sets out that that is the test that she has applied and that she assessed the costs accordingly, having regard to a decision of this Court, that is of Martin J in the matter of Pinehurst Nominees Proprietary Limited v Coeur De Lion Investments Proprietary Limited [2015] QSC 122 at [61] and [62], which cited the decisions of Asprey J in the matter of WA Gilbey Limited v Continental Liqueurs Proprietary Limited [1964] NSWR 527 at 534 and McGill DCJ in the matter of Hennessey Glass & Aluminium Proprietary Limited v Watpac Australia Proprietary Limited [2007] QDC 57.
- [7]It does appear that the decision of Asprey J in WA Gilbey Limited is the classic authority on the question of the award of such costs. There, his Honour said at 534:
A taxing officer in a party and party taxation should allow a successful litigant, in whose favour an order for costs has been made, a just and reasonable amount in respect of each item claimed in such litigant’s bill of costs where such item was, in fact, incurred on behalf of the litigant by his solicitor in respect of some step or matter in the litigation which either (i) was necessarily taken or performed for the attainment of justice or the maintaining or defending of the litigant’s rights in the circumstances of the particular case, or, (ii) although not necessarily taken or performed for such purposes, would reasonably have been taken or performed for any of those purposes by a solicitor acting at the time when it was taken or performed without extravagance in conformity with the then situation of the case and not in conflict with the statutes and rules, the practice of the court, and the usages of the legal profession appertaining to such a case.
In determining whether an item of costs is “necessary” or “proper”, the taxing officer would have regard to the facts in issue between the parties’ litigation as disclosed by the pleadings and to all facts which render probable the existence or non-existence of the facts in issue including those matters which would affect the weight or credibility of any such facts. But, in making his decisions upon these matters, the taxing officer should place himself [or herself] in the position of the solicitor sitting in his [or her] office chair engaged in the task of preparing the case for trial and, to use the words of Sachs J in Francis v Francis and Dickerson at 96: “…in particular, care must be taken not to be affected by what is colloquially termed ‘hindsight’.” The question of the necessity for or propriety of any item of costs should be judged by the state of things known or which ought reasonably to have been known to a diligent solicitor at the time when the expenditure was made, or the liability therefore was incurred.
- [8]So the authorities show that the test is the necessity or propriety of the costs that were incurred, and that is the approach which the costs assessor has clearly said that she has followed. She has also had regard to rules 720 and 722 of the UCPR. She explicitly said in paragraph 1.5(c) that she applied the test of necessary or proper, as she had previously set out. She then turned to the question of the assessment of counsel’s fees given that test. She rejected, as she was entitled to do, that she was obliged to follow the approach taken in the Federal Court’s National Guide to Counsel Fees and the Victorian Supreme Court scale. What she found was that the complexity of the matter was sufficient to justify the engagement of a senior Queen’s Counsel.
- [9]In other words, she was satisfied that it was necessary or proper to engage a senior Queen’s Counsel, and indeed, both parties to the litigation took that course, and it was not suggested before me that that was not the proper course to take.
- [10]She then looked at the fees charged by the senior Queen’s Counsel who was engaged. She did note that the fees charged were at the higher end of the range but nevertheless considered they were appropriate, considering the experience and expertise of senior Queen’s Counsel. There is no suggestion that the fees charged were not proper fees to be charged by a senior Queen’s Counsel. Accordingly, she said she saw no reason to reduce the rates charged by him.
- [11]In my view, that decision is unimpeachable. There is no error of principle in the decision she made. The fact that the costs assessor did not just say that she was applying the correct test but that she did apply the correct test is supported by the fact that she refused to allow the reasonable fees charged by junior counsel where there was some duplication of work done by senior and junior counsel. In my view, had this case been one where there had been a costs order on the indemnity basis, it would have been reasonable to allow the fees of both junior and senior counsel that were well within the proper range and where the work was reasonably prepared and done by them. Instead, she allowed fees for work done only by junior counsel or only senior counsel on the standard basis in circumstances where the work was, as she put “necessary or proper”.
- [12]The next question is whether or not there is any error in principle in the number of hours which she allowed for counsel’s preparation and appearance. Essentially, the argument put forward by the plaintiff was that led to fees which were so manifestly excessive as to suggest there must have been some misapplication of principle. However, this was, as everyone has accepted, a complex matter, warranting the engagement of senior Queen’s Counsel, and which clearly required many hours of preparation. I do not accept that the quantum of fees incurred as a result of allowing the necessary or proper fees for counsel would lead one to the conclusion that there is some undisclosed error of principle in that allowance.
- [13]Accordingly, I would dismiss the application for review of the costs assessment, apart from one matter, where it was properly conceded by the defendant, on a review of the plaintiff’s submissions, that an arithmetical error had been made by the costs assessor in failing to reduce item 526 from four hours to two hours, despite a concession that had been made by the second and third defendants, and a reduction in item 489 from four hours to two hours for the same concession. Accordingly, that can and should be corrected on review to allow for two hours only on item 526. In all other respects, the decision is affirmed. I fix the costs in the amount of $8300.